Whole-farm income insurance program gaining traction

The proposal is sure to be a topic of discussion at intergovernmental meetings later this year

A new proposed program to AgriStability could be modelled similar to crop insurance.

Support for an alternative program to AgriStability continues to gain momentum.

Canadian agricultural ministers are continuing to consider replacing AgriStability with a margin-based income protection program as soon as 2023.

Complaints of AgriStability being costly and ineffective, particularly on the Prairies, prompted governments in those jurisdictions to explore other options.

Talks to reform AgriStability thus far have resulted in significant, but not far-reaching, changes.

Removing the reference margin limit is the most substantive change, and it will make the program easier for producers to access it, but the dollars they receive are viewed as inadequate by many.

A new five-year agreement between the feds and provinces begins in 2023, and already one of the alternative programs continues to gain support.

Blaine Pedersen. photo: Supplied

Manitoba’s Agriculture Minister Blaine Pedersen has championed the idea of a margin-based insurance program since at least last year.

During a March 25 press availability, he continued calls for more broad changes to business risk management programs in the long term, including a potential replacement for AgriStability.

“We think that is a much better way of producers being able to insure themselves,” he said.

He told reporters his government will continue to lobby for a livestock insurance program and explore the efficiency of a whole-farm margin insurance (WFMI) program.

“We’ve continued to work on margin-based insurance,” he said. “We would like to see that proposal come forward in some form by this summer, and then we can put it out to the farm groups,” he said, hoping a comparison between it and AgriStability can be done.

In 2020, Alberta’s government hired a private firm to do an in-depth analysis of BRM programming to support its proposed changes and “and build the business case and key messages for the introduction of a new margin-based insurance program to complement crop insurance.”

Alberta was joined by Saskatchewan and Manitoba in forming the Whole Farm Margin Insurance Working Group, tasked with “assessing the feasibility of implementing the WFMI program, finding solutions to the current challenges identified in the AgriStability programs including timeliness, predictability, equity, and simplicity.”

Earlier this month, that group began a search for someone to “develop program details and assess how the proposed WFMI concept program would work for various scenarios.”

The proposed program would be modelled like crop insurance. According to documents from the working group, the model insures an entire farming enterprise for a margin decline from revenue fluctuations, expense changes, or a combination of the two.

A farmer’s insurable margin is based on historical yields, prices and expenses. A producer would be able to choose their level of coverage for their insurable margin from a minimum of 50 per cent to a maximum of 90 per cent. If a producer’s actual margin in a year is less than the covered portion of the insured margin, a payment is triggered and the producer would be paid the difference.

Alberta’s government did not respond to requests for comments, but its Minister of Agriculture and Forestry Devin Dreeshen has previously said replacing AgriStability with a margin-based insurance program was being considered. He’s believed to be among the staunchest champions of the new policy, and seeking support from his cabinet colleagues.

Saskatchewan said in a statement it was working to assess the feasibility of such a program, but, “There is no decision on this program as we are at the initial exploratory and development stage.”

Bibeau’s office said alternative business risk management designs are being analyzed.

“The governments are working in close collaboration to develop these alternative designs and the federal government and the Prairie provinces have sought additional analysis through contracts. All jurisdictions have shared their draft requests for proposals in advance for comment. It is premature to provide comment on those submissions for longer-term changes,” the statement said.

Discussions on the longer-term reforms to business risk management programs are set to take place in Guelph, Ont. later this year.

About the author

Reporter

D.C. Fraser

D.C. Fraser is Glacier FarmMedia’s Ottawa-based reporter. Growing up mostly in Alberta, Fraser also lived in Saskatchewan for ten years where he covered politics, including a stint teaching at the University of Regina’s School of Journalism. He is an avid fan of the outdoors and a pretty good beer league hockey player. His passion for agriculture and agri-food policy comes naturally: Six consecutive generations of his family have worked in the industry.

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